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Brandcorp Holdings Limited - Audited Results For The Year Ended 30 June 2005
Brandcorp Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1992/006647/06)
Share code: BRC
ISIN number: ZAE000013611
(`Brandcorp` or `the company`)
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2005
Milestones
* Operating profit exceeds R100 million
* HEPS exceed R1,00 per share
* Operating profit up 29,2%
* Headline earnings per share up 40,3%
* Distributions per share up 66,7%
* Net asset value per share up 28,5%
ABRIDGED GROUP INCOME STATEMENT
30 June 30 June
2005 2004 %
Audited Audited change
R`000 R`000
Revenue 824 578 720 655 14,4
Operating profit 114 420 88 581 29,2
Fair value of forward exchange
contracts 11 399 348
Net interest received 475 439
Net profit before taxation 126 294 89 368 41,3
Taxation (40 393) (29 723)
Current (37 480) (26 284)
Secondary tax on companies (2 491) (1 114)
Deferred taxation (422) (2 325)
Net profit after taxation 85 901 59 645 44,0
Headline earnings per share - cents 112,8 80,4 40,3
Earnings per share - cents 112,8 80,4 40,3
Diluted headline earnings per share
- cents 109,0 75,8 43,8
Diluted earnings per share - cents 109,0 75,8 43,8
Number of shares in issue (000)* 76 635 73 923 3,7
Weighted average number of shares
(000)* 76 159 74 155 2,7
* Net of treasury shares
RECONCILIATION OF HEADLINE EARNINGS
30 June 30 June
2005 2004
Audited Audited
R`000 R`000
Net profit after taxation 85 901 59 645
Adjust for:
Profit on disposal of tangible assets (5) (34)
Headline earnings 85 896 59 611
Abridged group balance sheet
30 June 30 June
2005 2004
Audited Audited
R`000 R`000
Assets
Non-current assets 31 847 24 982
Tangible assets 16 313 15 860
Intangible assets 7 734 900
Deferred taxation 7 800 8 222
Current assets 385 273 329 066
Inventories 146 972 118 203
Accounts receivable 153 752 139 126
Cash and cash equivalents 84 549 71 737
417 120 354 048
Equity and liabilities
Capital and reserves 272 676 204 669
Long-term liabilities 7 223 22 957
Current liabilities 137 221 126 422
Non-interest-bearing liabilities 94 216 98 304
Interest-bearing liabilities 15 927 15 831
Taxation 27 078 12 287
417 120 354 048
Net asset value per share (cents) 355,8 276,9
Tangible net asset value
per share (cents) 345,7 275,7
ABRIDGED GROUP CASH FLOW STATEMENT
30 June 30 June
2005 2004
Audited Audited
R`000 R`000
Operating activities 58 673 51 639
Operating profit before working
capital movements 119 485 92 641
Increase in working capital (36 107) (16 425)
Net finance charges 475 439
Taxation paid (25 180) (25 016)
Investing activities (12 189) (27 652)
Purchase of tangible assets (4 873) (3 783)
Proceeds on disposal of tangible
assets 46 68
Purchase of intangible assets (7 362) -
Ordinary shares repurchased - (8 205)
Net transactions by share trust - (15 732)
Financing activities (33 672) (23 936)
Proceeds from issue of share capital 1 868 4 813
Payment of borrowings (15 638) (14 925)
Distributions to shareholders (19 902) (13 824)
Net movement in cash resources 12 812 51
Cash and cash equivalents at the
beginning of the year 71 737 71 686
Cash and cash equivalents at the
end of the year 84 549 71 737
STATEMENT OF CHANGES IN EQUITY
Non- Accu-
Share Share distri- mulated Total
capital premium butable profits
R`000 R`000 reserve R`000 R`000
Balance at
1 July 2003 706 15 236 - 158 497 174 439
Net profit
after taxation - - - 59 645 59 645
Ordinary shares
repurchased and
cancelled (28) (8 177) - - (8 205)
Ordinary shares
issued 34 1 688 - - 1 722
Net transactions
by share trust 27 (2 398) - (6 731) (9 102)
Dividend - - - (9 323) (9 323)
Capital
distribution - (4 507) - - (4 507)
Balance at
1 July 2004 739 1 842 - 202 088 204 669
Net profit after
taxation - - - 85 901 85 901
Share-based
payments - - 163 - 163
Ordinary shares
issued 15 1 021 - - 1 036
Net transactions
by share trust 12 5 450 - (4 630) 832
Dividend - - - (19 925) (19 925)
Balance at
30 June 2005 766 8 313 163 263 434 272 676
SEGMENT ANALYSIS
Turnover Operating Assets Liabilities
profit
R`000 R`000 R`000 R`000
Tools & Hardware 550 046 74 731 244 030 88 367
Leisure & Accessories 120 328 16 279 56 626 23 178
House & Home 154 204 21 197 52 725 25 327
Corporate - 2 213 63 739 7 572
Total 824 578 114 420 417 120 144 444
Commentary
Nature of Business
Brandcorp distributes niche consumer and industrial products to a broad range of
customers through three trading divisions:
Matus (Tools & Hardware) distributes power tools, hand tools & hardware,
servicing the needs of the industrial, building and construction, engineering,
agricultural, DIY and mining sectors.
Interbrand (Leisure & Accessories) distributes luggage, handbags, backpacks and
accessory products.
MIC/Prestige (House & Home) distributes dinnerware, cutlery, tableware, gifting,
homewares, kitchen tools, kitchenware, bakeware, paper products and BBQ
products.
Financial Review
All three of Brandcorp`s divisions produced outstanding results for the year.
High levels of activity within the construction and engineering sectors
generated growth within the Tools & Hardware division, whilst the Leisure &
Accessories and House & Home divisions benefited from buoyancy within retail.
Growth has been organic, with all divisions enjoying increased market share and
penetration.
Revenue increased from R720,6 million to R824,6 million (14,4%), with unit sales
increasing by 19,3%.
Operating profit increased from R88,6 million to R114,4 million (29,2%).
Earnings per share and headline earnings per share increased from 80,4 cents to
112,8 cents (40,3%).
The group has a policy of hedging against currency volatility by way of forward
exchange contracts. In terms of Statement of Generally Accepted Accounting
Practice, AC133, profits or losses on forward exchange contracts on hand are
recognised at balance sheet date, measured on a `mark to market` basis. Earnings
and headline earnings include the after tax effect of the fair value of forward
exchange contracts amounting to R8,1 million (2004: R0,2 million) which equates
to 10,6 (2004: 0,3) cents per share.
A continued and strong focus on working capital management has resulted in solid
cash flows from operations. Before working capital movements, cash generated by
operating activities during this financial year amounted to R119,5 million
(2004: R92,6 million) resulting in net cash resources of R61,4 million (2004:
R32,9 million).
Net asset value per share increased from 276,9 cents to 355,8 cents.
Generally Accepted Accounting Practice
These financial statements have been prepared on the historical cost basis, in
compliance with South African Statements of Generally Accepted Accounting
Practice. The accounting policies applied in the preparation of these financial
statements are consistent with the prior year.
Dividend Declaration
The board has declared a final dividend of 32 cents per share, bringing the
total dividend for the year (taking into account the interim dividend of 8 cents
per share declared on 16 February 2005) to 40 cents per share. The salient dates
are as follows:
Declaration date Wednesday, 24 August 2005
Last date to trade `cum` dividend Friday, 9 September 2005
Date trading commences `ex` dividend Monday, 12 September 2005
Record date Friday, 16 September 2005
Date of payment Monday, 19 September 2005
Share certificates may not be dematerialised or rematerialised between Monday,
12 September 2005 and Friday, 16 September 2005, both days inclusive.
Auditors` Report
These results have been audited by Grant Thornton and their unqualified audit
opinion is available for inspection at the company`s registered office.
Empowerment
Brandcorp continues to explore the most optimal manner in which to structure an
empowerment transaction, taking into account the aspirations of all
stakeholders, including employees, shareholders and customers. It is envisaged
that any such transaction would take place at a corporate level and would
include the group`s qualifying employees as well as a broad- based empowerment
grouping, which would add meaningful and measurable value to the group.
Acquisitions
The group`s criteria regarding acquisitions include:
Businesses with proven track records
Quality management
Cash generation
Growth potential
Alignment with the group`s competence in merchandise procurement, marketing and
distribution.
During the past year, a number of acquisitions were evaluated, but none met the
group`s criteria.
Brandcorp continues to pursue its acquisition strategy.
Prospects
The sectors in which Brandcorp`s divisions trade remain vibrant, and the
continued increase in national infrastructural spend bodes well for the group.
On behalf of the board
Colin Datnow Brad Taurog
Chief Executive Chief Financial Officer
24 August 2005
Registrars:
Computershare Investor Services 2004 (Pty) Ltd
Ground Floor 70 Marshall Street Johannesburg 2001
Secretary and Registered Office:
Light and Livingstone Financial Servicess CC 3rd Floor Palm Grove 196 Louis
Botha Avenue Houghton Estate 2198
Directors:
CS Datnow, S Ellerine*, JD Goldberg, JC Livingstone*, HB Marcus, BD Taurog, M
Yachad* (*Non-executive)
Brandcorp Holdings Limited
(incorporated in the Republic of South Africa)
(`Brandcorp` or `The Group`)
Reg No: 1992/006647/06
JSE Code: BRC & ISIN No: ZAE000013611
These results can be viewed on our website: www.brandcorp.co.za
Date: 24/08/2005 01:01:06 PM
Produced by the JSE SENS Department
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